South Korea's industrial output falls 1.3% in August as consumption, equipment investment also decline

South Korea's industrial output fell 1.3 percent in August from the previous month, with consumption and equipment investment also declining.

The all-industry production index (seasonally adjusted, 2020=100) stood at 118.7 in August, down 1.3 percent from July, according to the Ministry of Statistics' industrial activity report released Wednesday.

Overall industrial production has now fallen for two consecutive months, after rising 2.6 percent in June and then slipping 0.1 percent in July.

Mining and manufacturing output fell 4.8 percent from the previous month. Manufacturing production dropped 5.1 percent, with declines in automobiles (-24.8 percent), rubber and plastics (-11.0 percent) and semiconductors (-2.2 percent).

Service sector production, however, rose 0.5 percent from the previous month, driven by gains in information and communications (4.7 percent) and professional, scientific and technology services (2.3 percent).

The retail sales index, which tracks product consumption, fell 1.8 percent from the previous month — the second consecutive monthly decline following a 2.6 percent drop in July. Sales of durable goods such as passenger cars fell 4.5 percent, while non-durable goods including food and beverages declined 1.6 percent.

Equipment investment fell 9.5 percent from the previous month, reversing course after three months of gains. Investment in machinery, including semiconductor manufacturing equipment, rose 1.6 percent, but investment in transportation equipment dropped 32.8 percent, driven largely by declines in ships and aircraft.

Construction output, which reflects domestic construction activity by builders, rose 1.9 percent from the previous month. Civil engineering work fell 3.9 percent, but building construction increased 4.5 percent.

The coincident composite index cycle variation, which reflects current economic conditions, rose 0.5 percentage points from the previous month. The leading composite index cycle variation, which signals the future economic outlook, fell 0.1 percentage point.